Midland, MI and London, UK - June 05, 2008
The Dow Chemical Company (Dow) and EDF Trading today announce a four-year agreement to share liquefied natural gas (LNG) regasification capacity in order to secure LNG cargoes destined for the European and U.S. markets.
The agreement brings together two significant buyers in the wholesale natural gas market who are active in different geographic locations. EDF Trading will provide Dow with access to European LNG regasification terminals. Dow will provide EDF Trading with access to its regasification capacity at the Freeport LNG terminal in Texas. The Freeport terminal is still in the commissioning process, but is expected to be ready for commercial operation soon. Both parties will be able to compete more effectively in securing LNG supply by offering producers the opportunity to sell LNG based on the higher of U.S. or European natural gas prices.
“Dow is building an alternative energy portfolio that will help mitigate rising costs of the traditional energy sources of oil and natural gas. LNG is an important part of this portfolio,” stated Craig Barry, director of Dow’s LNG business. “With the expected growth in the global gas market, this agreement will offer producers flexibility and access to liquid markets in Europe and the U.S. We expect producers will find this new model very attractive as they evaluate downstream LNG opportunities.”
Eric Bensaude, Head of EDF Trading’s LNG business said, “As two large buyers of gas with complementary strengths, the agreement successfully leverages the existing relationships that EDF Trading and Dow have each already established in the LNG market. With gas evolving as a global market, it has been important for EDF Trading to look at cooperative opportunities to extend its gas business beyond Europe and therefore contribute to diversifying the sourcing of gas for the EDF Group.”
About Dow
About EDF Trading
EDF Trading, a 100% owned subsidiary of the EDF Group, is one of the leading participants in the European wholesale gas markets. It is involved in the whole gas supply chain including production, transportation, storage and sales. It currently trades on all of Europe’s principal trading hubs including Belgium, France, Holland and the UK, and is active in the developing hubs of Germany, Switzerland, Italy and Austria. It also trades natural gas in the US financial markets. EDF Trading owns a fast cycle gas storage facility in the UK and holds 10% of the IUK interconnector capacity between the UK and Belgium.
EDF Trading’s activities support the EDF Group’s growing gas business, which includes a European-wide portfolio of customers and gas-fired generation assets. EDF Trading is the interface to the wholesale gas markets for EDF in France and EDF Energy in the UK.
EDF Trading has taken a cooperative approach to building its LNG business. In 2007 it secured an LNG supply agreement with Qatar gas company RasGas. It has also cooperated with Mitsui & CO UK in securing cargoes. It has regasification capacity at the Montoir LNG terminal in France.
For Editorial Information:
Jolen T. Stein
The Dow Chemical Company
+1 985 783 3774
Kerry Kennedy
EDF Trading
+ 44 (0) 20 7061 4232
